INTRODUCTION

In 1976 the Postal Service filed its first annual comprehensive statement to comply with an amendment to the 1970 Postal Reorganization Act. The amendment, now codified as Title 39, United States Code (USC), Section 2401 (e), required that a comprehensive statement accompany the annual Postal Service budget submission to Congress. The amendment further required the Postal Service to explain and address (1) the plans, policies, and procedures designed to comply with the statutory mission of the Postal Service; (2) general postal operations, including data on service standards, mail volume, productivity, trends in postal operations, and analyses of the impact of internal and external factors upon the Postal Service; (3) financial information relating to expenditures and obligations incurred; and (4) other matters necessary to ensure that Congress is "fully and currently consulted and informed on postal operations."

Unlike the annual report of the Postal Service, which has been published since 1789 and which focuses primarily on Postal Service finances, the comprehensive statement summarizes the initiatives, accomplishments, and challenges faced by the Postal Service in the previous year. The comprehensive statements published since 1976 describe how the Postal Service has evolved over that period, the policy decisions that directed the changes, and the factors that influenced those policy decisions.

The format of comprehensive statements has remained consistent since the first publication. Chapter 1 deals with statutory requirements and details how the Postal Service met those requirements for the year addressed. Chapter 2 reviews operational changes, including automation and technological improvements, and explains current products and services. Chapter 3 provides an overview of Postal Service finances for the preceding year, described in more detail in the annual report. Chapter 4 includes the Annual Performance Report for the preceding year and the Annual Performance Plan for the following year, as is required by the Government Performance and Results Act (GPRA).

The 2005 Comprehensive Statement on Postal Operations is available in hard copy and may be found on the Internet at www.usps.com/financials/cspo/welcome.htm. For policymakers, stakeholders, and members of the general public interested in the Postal Service, the 2005 Comprehensive Statement and the 2005 Annual Report provide detailed information about what the Postal Service accomplished in 2005. The Strategic Transformation Plan 2006-2010 looks toward the future and describes the organization's strategic goals and plans for achieving them. Combined, these three documents provide a comprehensive overview of the Postal Service.

A. FUNDAMENTAL SERVICE TO THE PEOPLE

1. GENERAL

In 2005 the Postal Service achieved considerable success in a marketplace defined by increased competition in hard copy and package delivery as well as growth in electronic communications. A continued focus on service performance, customer convenience, cost management, and operational efficiency, strategies identified in the 2002 Transformation Plan, combined with a third straight year of rate stability, delivered greater value than ever for commercial mailers and consumers, driving total mail volume to a record 212 billion pieces.

Independently measured service scores show that on-time, overnight First-Class Mail delivery held at a record 95 percent, rising to 96 percent in Postal Quarter III. Service remained strong in other categories, as well. While customer satisfaction scores, also independently measured, matched a record 94 percent favorable at year end, they were marked by steady growth in the "excellent" and "very good" categories, strong indicators of customer loyalty.

Despite upward cost pressures resulting from delivery point growth of 2 million new addresses and rising benefit and fuel costs, the Postal Service met its 2002 Transformation Plan goal of removing $5 billion in costs by the end of 2005 - one year ahead of schedule - contributing to a record sixth straight year of positive total-factor productivity. And, through attrition, career employment has retreated to pre-1985 levels.

Outstanding debt was eliminated, reflecting both management efforts and the benefit of 2003 legislation reducing the Postal Service's overpayment to the Civil Service Retirement System.

Excellent customer service is tied directly to the efforts of Postal Service employees. With this in mind, the Postal Service has maintained its focus on developing a positive and productive workplace environment that encourages the best from each employee. The Postal Service has expanded participation in joint initiatives with the Occupational Safety and Health Administration and employee unions to improve workplace safety. These include the Voluntary Protection Program and the Ergonomic Risk Reduction Program. The Postal Service has reduced outstanding grievances and improved dispute-resolution processes. A new approach to hiring emphasizes the skills that contribute to success in a customer-service organization. Understanding that a well-informed workforce is a key to business success, the Postal Service established an extranet site, LiteBlue, to provide news, information, and self-service transactional features to employees through their home computers. The Postal Service's quarterly workplace environment survey - sent to all career employees once a year - continued to show improvement, both in the response rate and the positive ratings on an index of key indicators.